Texans should look to compact to correct ACA
This commentary originally appeared in the Austin American-Statesman on March 2, 2014.
Obamacare has undergone eighteen unilateral administrative changes; most have been substantive and in contradiction to the Affordable Care Act. This does not count a roughly equal amount of adjustments and revisions that Congress has undertaken to clarify the law. Then there is the current federal court of appeal litigation as to whether the IRS-based federal exchanges can be placed when the plain language of the statute only expressed intent to supply premium tax credits and alternative penalties through state exchanges.
As businesses begin to issue shareholder reports on escalating health care costs, many large employers are calling the added burden “sizable,” according to a current Wall Street Journal article. Wal-Mart characterized the impact as a “headwind,” and both Pantry and J&J Snack Foods report that they plan for an increase of more than $500,000 per year on ACA health insurance-related costs. Sixty-five percent of small businesses will also see a spike in rates.
Reminding us that the ACA was the ill-begotten product of harried political maneuvering, congressional leaders writing in a pending federal appellate amicus brief called the law “disjointed, confusing, and even self-contradictory,” describing it as a “preliminary draft” that was rushed to avoid a certain filibuster upon the election of Republican Scott Brown.
Now that Americans are “finding out what is in it,” 64 percent of Americans say that the ACA would not have passed “if we knew then what we know today.”
Americans are now wondering if there is any way back to a rational plan that incentivizes what is best about America’s doctors, access to medicine and insurance providers.
Fortunately, states have a solution: the Health Care Compact. Participating states are acting on a constitutionally recognized contract authority to form coalitions with other similarly interested states. While most have obtained congressional consent, interstate compacts have been used over two hundred times to address regional concerns. For example, compacts have been used to settle border disputes, resolve management issues and establish regulatory consistency. In fact, now it is likely that a given state is subject to an average of 25 compacts.
Eight states have already joined the Health Care Compact to restore control of medical services and systems to the states. An additional ten states are actively considering joining the compact. In an important procedural move, Rep. James Lankford, R-Okla., has just introduced H.J. Res. 110 to authorize “member states ... to implement their own health care systems without interference from federal bureaucrats.”
The grant of congressional consent would uphold constitutionally mandated state police power vesting oversight of “health, safety and welfare” matters in the states. This sovereign state authority logically includes the regulation of health care policy.
The structure of the Health Care Compact operates much like a block grant, as it allows states to manage federal health care funds that are currently allocated to the states, yet the states would retain any savings realized by more efficient
administration, tighter oversight, or utilization of market-based practices. The compact also establishes an advisory Healthcare Commission that would convene to recommend nonbinding resolutions, assess health care issues and publish data.
States are far better positioned to challenge the aspects of health care that have troubled both patient customers and society at large. Just the unwarranted use of medical resources — or care that provides no marginal value — costs up to $325 billion, and preventable illness runs up to $50 billion a year. Harder to quantify are the costs of the growing federal bureaucratic burden on doctors and the unapprehended social medicine fraud. When it comes to providing both the quantity and quality health care that reflects American capability, the states will do it best.
Americans who support their state’s right to enter this grand contract to restore health care to state management are expecting congressional representatives to make good on their many promises to reform the ACA. What better way to revise or repeal than to return this matter of highest state interest to the state authority place it belongs.
Lugo is director of the Center for Tenth Amendment Action at the Texas Public Policy Foundation, a nonprofit, free-market research institute based in Austin.